US OCTG, line pipe markets suffer as oil companies cut back

Large oil companies' plans to cut back on spending and oil barrels will result in major market consolidation, more downward pressure on prices for oil country tubular goods (OCTG) and line pipe products and an oversupply of material, according to industry participants.

During first quarter 2020 earnings calls, many companies talked about restrictions that were in place for barrels of oil for the rest of the year. “There's a lot of uncertainty on the timing of the recovery. We're planning for a slow one as it takes time to restart businesses and for consumers' confidence to grow,” Exxon chairman and chief executive officer Darren Woods said in a May 1 earnings call. “For the full year, estimates range from a loss of four million to 12 million barrels per day. We expect it to be on the higher end of the range.” The Covid-19 pandemic has caused much uncertainty especially in oil and gas markets. “This pandemic has accelerated what was probably going to happen anyway – you’re going to see Chevron, Shell, and Conoco, the big dogs [in oil] out there just picking everybody off,” one steel distributor said "Pipe distributors and the smaller guys...

Published

Elizabeth Ramanand

June 01, 2020

21:34 GMT